SIMON: Pulling away the football, you mean, at the last minute as Charlie Brown is going to kick it?

NOCERA: Yeah, that is right. That's exactly right. So we've been down this road before. We watched what happens. They always figure it out at the last second or they kick the can and nothing bad happens. Though I would like to point out that in the debt ceiling crisis the last time, S&P did lower U.S. bond ratings. You know, that's not insignificant.

Having said all that, they just expect that this will be taken care of. And they are oblivious to the possibility that this could inflict serious damage on the economy. On the other hand, Wall Street has been oblivious for the larger economy for quite some time now.

SIMON: But does that tie the prices we're seeing on the exchanges to something that's not real?

NOCERA: Yes

SIMON: And haven't we had that - yes, it does. OK.

(LAUGHTER)

NOCERA: OK, so from my point of view there are two things going on here. One is spelled B-U-B-B-L-E.

SIMON: Bubbala?

(LAUGHTER)

NOCERA: I believe we are in big time bubble. But the bubble's being fueled not by the real economy, but by the Federal Reserve's constant buying up of bonds and flooding the economy with money. The Federal Reserve basically believes nobody else is doing anything to help the economy, they have to. This is their way of doing it.

The consequences of the Fed's moves is it drives up asset prices, particularly stocks, which have become pretty much the only place you can put your money these days, with bond prices so bad.

SIMON: Yeah. So how would you project that these spending cuts could affect the economy in the next few weeks, and over the long term?

NOCERA: Well, there are real economic effects and then there are psychological effects. Let's talk about the real economic effects. Defense is going to be cut. That's jobs. Medicare payments are going to be cut. You know, doctors are going to have less money and hospitals are going to get less money. All sorts of small business loans are going to be delayed.

People are going to be laid off in governments as the sequester affects trickle down. If the sequester isn't solved, it has the potential to be a 1 percent drag on GDP at a time when GDP growth is only like 2 to 2.5 percent. The idea that this is not going to affect the economy is nuts. Now, let's talk about the psychological effects.

You're standing - you go to the airport, and instead of taking 15 minutes to get through the line at the TSA to get to your airplane, it takes two hours because there are fewer people.

SIMON: Yeah, but you know some Republicans have said, what do they call this, the fireman effect, that whenever a government entity is told to slash the budget, they begin by saying ok we've got to fire firemen. They would contend that there more intelligent economies to make.

NOCERA: Well, so be it, but if what happens - if the consequence of what happens is that air traffic is slowed, then that will have a psychological effect on the country in terms of the way it thinks about spending and the way it thinks about the economy, and I think that could be just as devastating in its own way as the real economic effects.

And so what I'm really saying here is that for Wall Street to be looking the other way and saying this is no big problem is delusional, and if the sequester lasts for a while, it will catch up to us just like the Internet bubble did, just like the housing bubble did, etcetera, etcetera, etcetera, etcetera.

SIMON: New York Times columnist Joe Nocera speaking with us from the studios at the Radio Foundation in New York City. Joe, thanks so much for being with us.